May 24 (Bloomberg) -- Raiffeisen Bank International AG
Chief Executive Officer Herbert Stepic offered to resign from
eastern Europe’s second-biggest lender, a day after officials
began a probe into his investments through offshore accounts.

Raiffeisen will “promptly consider” Stepic’s offer to
quit, the Vienna-based lender said in a statement today. The 66-year-old CEO has worked at the bank for four decades and
spearheaded its expansion into 17 former communist countries
after the Soviet Union’s dissolution.

Raiffeisen ordered an internal review yesterday to
determine whether Stepic’s offshore accounts, set up by UBS AG
to invest in Singapore real estate, comply with bank rules.
Austria’s financial market regulator has also requested more
information. Raiffeisen fell as much as 3.6 percent in Vienna
trading and the shares may remain under pressure until the bank
resolves the questions around its leadership.

“His departure will leave a void in the absence of
credible succession planning,” Eleni Papoula, a London-based
analyst at Berenberg who recommends investors sell the shares in
Raiffeisen, wrote in response to questions. “In the short-term,
the stock will continue to be under pressure.”

Raiffeisen fell 2 percent to 26.47 euros by 12:46 p.m. in
Vienna trading. While the stock has gained 12 percent over the
last 12 months, giving the lender a 5.2 billion-euro ($6.7
billion) market value, it remains below the 32.50-euro initial
public offering price of April 2005.

‘No Reservations’

“All investments were made with income already taxed in
Austria,” Stepic told reporters in Vienna, without taking
questions. “I have no reservations in disclosing these facts to
the relevant authorities.”

Stepic will stay at the bank until Raiffeisen decides
whether to accept the resignation, the lender said. The Austrian
Press Agency reported that the bank will nominate a successor
for Stepic on May 27, without saying where it got the
information.

Finding a replacement may not be easy, said Erste Bank’s
Guenter Hohberger, who advises investors to buy Raiffeisen
shares.

“Understanding of the region where Raiffeisen operates
will be a key,” Hohberger said in a telephone interview in
Vienna. “It will be important to have a background in the
region. They’re in 17 different markets that aren’t
homogeneous.”

A new CEO will also need to address Raiffeisen’s capital
requirements, which Standard & Poor’s said are of “increasing
concern,” in a report issued last month.

‘Fresh Perspective’

Raiffeisen had to cancel the April sale of a subordinated
bond after failing to get enough orders. Stepic said last month
he considered his bank’s capital situation to be sufficient for
growth and ‘‘very relaxed.”

“If someone external takes on the role with a fresh
perspective it could be positive in the longer term,” said
Papoula. “However, the most likely scenario would be that
someone internal takes over, who would carry on with the
existing strategy.”

The probe doesn’t come as the first into Stepic’s
investments. Austria’s financial regulator ended an
investigation into the CEO’s land deals in Serbia this week
after he showed he had already exited the investment. In April,
he returned 2 million euros to the bank after his 2012 salary
swelled despite falling profit and job cuts.